Prices fell by 1.2% in October, helped by lower commodity prices, which in turn led to lower import prices.

Some also blame the effect of cheaper imports from the Chinese mainland.

Better off?

The Hong Kong economy is expected to post negative growth for the year as a whole.

"I think we are going to see stronger deflation pressures because the economy had a significant slowdown in the third quarter going into the fourth quarter," Paul Tang, senior economist at Bank of East Asia, said.